The Bullish Case For Dividend Stocks In 1 Chart

Break out the bubbly, because it’s Friday in the Wall Street Daily Nation! For the newbies in the group, once a week I embrace the adage that a picture is worth a thousand words. And I select a handful of graphics to convey important economic or investment insights.

This week, I’m dishing on the most shocking GDP report in the world, the uncanny correlation between the stock market and joblessness, and the one statistic that points to another banner year for dividend stocks. Now, on to this week’s Friday Charts …

The Mysterious GDP Miss

Boy, do I look stupid. Or do I?

It was only last week that I told you to expect an uptick in economic growth in the United States in 2013. And then Wednesday, the Commerce Department shocked the world, revealing that the economy contracted 0.1% in the fourth quarter – instead of growing 1.1%, as was widely expected.

But fear not. The unexpected drop can be blamed on a massive decline in military spending related to the drawdowns in Iraq and Afghanistan.

Click to enlarge(Click to enlarge)

As you can see, spending plummeted $40 billion quarter-over-quarter. The good news? The rest of the economy is humming along just fine.

The list of positive contributors goes on. So fear not. The U.S. economy isn’t on the precipice of another recession.

Stocks Follow Earnings … and Jobs!

It was certainly a January to remember. The S&P 500 kicked off the year with a strong rally, rising almost 3%. That’s the fastest start to the year since 1997. Don’t kill the messenger. But a pullback could be on the horizon in the short term.

Am I saying that because I think stocks have risen too far, too fast? Nope. It’s because this week’s initial jobless claims jumped 38,000, to 368,000.

So if next week’s report includes another uptick in claims, don’t be surprised if stocks take a breather. Since the long-term trend remains bullish, though, we should treat any pullback as a buying opportunity.

Mo’ Money, Please!

After a record-setting year of payouts, you’d think companies couldn’t afford to keep doling out more and more dividends. But you’d be wrong!